INTRODUCTION TO ENTREPRENEURSHIP & LEAN STARTUPS

New Venture Creation

- refers to the general trend of setting up new enterprises in a society.

Innovation
- Entrepreneurship can be described as creative and innovative response
to environment.

Lean Startups
A startup is a human institution designed to create a new product or service
under conditions of extreme uncertainty.
- Launching a product tends to be a hit or miss proposition.
- research by shikhar ghosh suggests that’s 50-75% of startups often end
up failing.

Why startups fail?

Ignore customers No market need Not the right team
Poor marketing Ran out of cash Need biz model
Product mis timed Lack passion Failure to pivot
Poor product Pricing issues Don’t use network
Disharmony on team Lose focus Burn out

Some steps in building lean startup

1. SMART Experiment – come up with business ideas
2. Business Model
3. Validate Prototypes & Minimum Viable Products (MVP)

ENTREPRENEUR’s vs BUSINESS OWNERS

Entrepreneurs
1. Focus their efforts on innovation
2. Greater risk takers
3. Goals – profitability and growth

Small Business Owners

1. Manage their businesses by expecting stable sales, profits.
2. More focused on day to day running of the business without having a
vision
3. Lack creativity and the need to innovate
4. Less risk oriented

ENTREPRENEURS & INNOVATION

Innovation is one of the key characteristics of entrepreneurs
- The successful exploitation of a new idea

Why is innovation important?

- Innovation is a risk taking activity
Types of Innovation
1) RADICAL INNOVATION – Whole new design, ideally using new
components configured in a new way e.g. first mobile phone car
2) INCREMENTAL INNOVATION – Improving existing designs through
improving components eg. New models of mobile phone

INNOVATION & FIRM GROWTH

- By innovating, a firm can obtain temporary monopolistic profits until
other firms are able to imitate the innovation or develop an even better
one, thereby allowing firm to grow (Niefert, 2006).

Entrepreneur as Innovator
Eg. Steve Jobs

ENTREPRENEURSHIP & ECONOMY

Are entrepreneurs important to their countries economy?
1. Simulates more innovation leading to superior levels of economic
performance.
2. Creates jobs in the economy in the longer run.
3. Increases in tax revenue – highly variable across regions and countries.

WHAT IS ECONOMIC DEVELOPMENT?

The increase in the SOL of a nation’s population associated with sustained
growth from a simple, low-income economy to a modern, high-income economy.
Eg. China lifts over 700 million people out of poverty.